You’ll have to forgive me, I know there is more to research administration than the NIH. (DOD, anyone? NSF?) It’s not that I choose to ignore the rest of the agencies out there funding the Federal share of academic research….really. It’s just that the NIH is in many ways, the canary in the coal mine for new policy at the Federal level. So I figure it’s going to be helpful to more than those of us working in the biomedical research area to talk about some of these issues.
The August Freak Out
In August and September 2013, NIH announced that their grants management systems would transition awardees to a new payment management process in order to allow the agency and their institutes and centers to better track award spending. They provided some preliminary details – enough to make every central office at every university with NIH funding to freak out – how is this going to work? Subsequent communications clarified the process, which have allowed schools to prepare and plan.
The transition from PMS pooled (G) accounts to PMS (P) sub-accounts will occur over two fiscal years, and it started in October of 2013. There is an excellent FAQ on the transition, which will occur in two phases.
- Phase 1 – Effective October 2013: Transition of Awards with New Document Number
- Phase 2 – Effective October 2014: Transition of Continuing Domestic Awards
The notice of grant award will contain additional information to indicate the type of account (G to P) that is being used to award the funds in the transition year. The transition year will require a new award type (Type 4) and administratively shortened segments – for competitive awards in FY14 and FY 15.
Financial reporting requirements will be affected during these changes (there will be additional closing periods) and the reporting requirements for awards will be affected by whether or not the award was made under SNAP (now RPPR). During the transition, it looks like non-competing continuations under SNAP may need to submit two FFRs in FY14.
Importantly – carryover authority is not automatically available during this time frame. Grantees will report unobligated balances and receive approval for these funds to be re-obligated to the new sub-account. NIH states that even if the award was issued with “automatic carryover authority” the grantee has to receive approval through a new NOGA before funds are drawn down.
What You Need to Do Right Now
Review your award portfolio and take steps to ensure awards are appropriately charged for direct costs up front, reducing the need for cost transfers. This saves time, heightens compliance and allows your institution to meet the challenge of shortened reporting time frames.
- How many awards are under SNAP? How many are not under SNAP? (This will affect the calculation of your unliquidated obligations and unobligated balances – which, in this new world of payment management should be minimal.)
- What are their project dates, and how are they looking financially? (Are all expenses hitting the project in a timely manner?) If not, why not?
- What systems are in place to ensure direct charging of appropriate expenses (salary and non-salary) to awards, and reconciling expenses on a monthly basis? If these systems don’t yet exist, what needs to be done to set them up?
- Is there a process to regularly meet with investigators to review award activity and plan for changes in allocation of expenses proactively (to prevent cost transfers)?
- What reporting and queries can you utilize to easily manage your portfolio and provide updates to your investigators?
- Start to develop great relationships with your subcontract sites now – if you haven’t already. You’ll need to have them generate their final invoices faster than they have in the past.
What Your Investigators Need to Know
We all know PI’s who think of Federal grants like funds stuffed between a mattress for a rainy day. Yet for every investigator who thinks like that, there are two that understand and have a very keen appreciation for managing awards. However, the new payment management system, combined with the shortened time frame for closing out awards is creating a new environment for managing sponsored funds. We have to impress upon our most studious investigators that if they do not use their Federal funding, they will lose it.
This is the time when we can help our investigators by providing administrative leadership:
- Clearly outlining what our investigators need to know about the policy and how we need to work with them to administer their projects.
- Providing them with financial information regularly so they can make decisions about their research plan and strategy (and we can ensure administrative actions regarding purchasing, effort and salary administration and reimbursements are managed in a timely manner).
- Updating our investigators regarding policy changes and trends in the availability of carry forward funds, additional reporting requirements, and other trends to assist them in managing their current awards and planning for new applications.
The Department of Defense already has a strong payment management system in place, but it stands to reason that the Department of Health and Human Services, and other federal agencies will look to adopt more stringent monitoring of federal grants. Have you seen the Do Not Pay website? The Obama administration, in creating a government that utilizes data and analytics to generate accountability, is creating a network of systems to ensure that funds are distributed, tracked and paid to the proper recipients.
One Part Challenge, Two Parts Opportunity
To be sure, the next 18 months aren’t going to be easy – but working together we’ll transition to the new payment management system. More importantly – it’s an opportunity to introduce new ways of managing sponsored projects that can remain in place to meet the challenges of tighter Federal funding in the future.